GRI Reporting Levels 101

You have decided to report. A first report. You have made a preliminary decision to report in line with GRI Reporting Application Levels. Then you have to decide:  declare a reporting level or not declare a level or just state that your report is in the "spirit of " the GRI? What's the difference between all these and why is it important? How do you make the decision for your Company? And how do you, as a reader of reports, view the ways Companies choose to select levels.

For the lay reader, this may all be gobbledygook. Or gookygobble. Or simply gooky. What the lay reader wants is a good reflection of the Company's sustainability practices and impacts, in language s/he can understand, in as comprehensive way as possible without including next week's shopping list. Whether the Company has responded in full or in part to indicator EN27 or clause 4.9 or LA5 is really not significant. If the report communicates well, is complete and credible, the lay reader will not discern the nuances of GRI reporting adherence. I suspect that 90% of readers are lay-readers. But that's just a very wild guess.

So why all the fuss about Reporting Levels?
Wait .. not so fast ......

A quick explanation of reporting levels:
The GRI Framework includes 42 background company profile etc blurb disclosures and 79 Performance Indicators in 6 categories (economic, environment, human rights, labor standards, product reponsibility, society) Download here a one page crib-sheet of all the indicators.

A level: This is the most transparent level of reporting.This means the Company responded in full to all the indicators in the GRI G3 framework, including any relevant published sector supplements. In addition, the reporter must include an index of the GRI framework, indicating where the reader can find the information for any specific indicator.  There is a small loophole: If a reporter decides not to disclose on a specific indicator, or doesn't have the full data available, then an A level can still be claimed if the reporter explains why there is no disclosure and offers some sort of intention to disclose in the future eg. We have not yet fully calculated our carbon footprint, but we intend to do so by 2015. In theory, one could claim an A level report by disclosing absolutely nothing and promising to do so years hence. In practice, though, different Companies do skip certain indicators, but these are only a few per Company. 

B level: This is a reasonable level of transparency. This means that the Company has disclosed all the Company profile blurb required by the first part of the GRI Framework and has selected 20 of the 79 additional indicators with at least one from each category.Sector supplements are not mandatory at this level. SImilarly, non-disclosure is acceptable if there is a good excuse explanation. An index must be included as for level A.

C level: This is hardly transparent at all. The Company must disclose 28 of the 42 profile disclosures, and 10 of the 79 performance indicators. This is so not a stretch that its suitable only for first time, small business reporters only who want to get on record that they have reported, demonstrate that they are thnking in the right way about sustainability, and provide a basis for future more ambitious reporting. An index must be included as for Levels A and B.  

(At all these levels, reporters may include external assurance and earn a + (A+, B+, C+). But dont get me started on assurance .....).

Undeclared level: This could be any of the above level of transparency. The reporting Company is unsure of the reporting level or for whatever reasons doesn't want to state a level (perhaps someone (like me) might check ). Instead, the Company includes a GRI Index and notes where everything is in the report.

"In the spirit of" level: This is "in the spirit of" transparency. This is a Company who says, OK, everyone is using the GRI so we had better do so too. But we really can't be bothered doing all the work of checking that we have responded to a list of indicators, and we really don't think the GRI Framework is all that big of a deal, so let's just say we were inspired by  the GRI, and everyone will think we are great. I call it the pot-luck level, as you never know quite what you will find in a report written in the spirit of the GRI. Also, there is usually no index.

Good. Now we have got all of that clear, how does a Company select the reporting level?

Six Commandments

Commandment One: Thou shalt not report at a level for which you do not haveth data.
Check your inventory of information. Work up the scale. Enough for C? Enough for B? Enough for A? If you have answered no to any of these questions, check whether you are close. In some cases, with just a small stretch, you may be able to get data for a couple of indicators wihtout too much additional effort.

Commandment Two: Honor thy bosses, so that your days may be long in the Company that thy worketh in.
In other words, check what level of disclosure your bosses permit.  You may have information, stories and data, but the bosses may not be all that comfortable just yet with sharing it with the world. Transparency is sometimes a little hard to stomach for some managers. Yes, there are actually people in business who don't believe that sooner or later a lack of transparency won't catch up with them.

Commandment Three: Thou shall not covet thy neighbours reporting level. 
There may be good reasons for reporting at a lower level,  You might wish to report at a lower level that you are capbable of, in order to leave room for the perception of improvement next time (!), or because you are not entirely sure of the way you might want to report your data long term, and perefer to leave some room for manoevre (especially if you are a first time reporter). Remember that you can declare a level and still report more than minimum number of indicators. Also, as a first time reporter, the energy that delivering the report will require may not leave much for doing an excellent job on aligning your indicators. So, you might prefer to reduce the challenge first time around and focus on content.

Step Four: Thou shall reporteth at a level no lower than what you dideth before. 
Each report must maintain or exceed previous reporting level.Forwards, not backwards. Didn't Einstein have a theory about that ?

Step Five: Thou shalt remain true to thine  soul.
Check who you are. If you are a major global Company who has been reporting for years and years, sticking at C or undeclared level is not all that impressive. Might as well just bite the bullet and go for an A.

Step Six: Thou shalt not existeth in a vacuum.
Check what your closest competitors are doing. If they reported A then you better report A. Right ?

Finally, when all is said and done, who really notices ? Often the reporting level is not about how truly transparent the Company is or wishes to be, but about market leadership and reputation and other external factors. A leading Company reports at A.  A mediocre Company reports at C.  (first-timers excepted). Or so it seems. Companies perceive A, B and C as a grade of their Company, not of their transparency. Which might be a good thing, actually. This leads to a kind of race for a transparency ranking which, whatever its motivation, is positive.  In the next revision of the GRI framework, either the GRI will eliminate Application Levels, or it will have to add a few levels higher than A so that more Companies can demonstrate higher levels of leadership (I am taking out a patent on that idea).

Finally , ok, final finally, what is more important than your A, B, C, U or Spirit report is what you actually tell your stakeholders and how comfortable with transparency your Company is. It's ok to take some time to build transparency, though preferably you will achieve A level transparency before the Apocalypse.  (Apocalypse = the date when B&J stop manufacturing Chunky Monkey).

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm. Visit our website at: www.b-yond.biz/en